Rose v. Adams, (2000)

• Decision Date: 11 January 2000
• Docket Number: CIV. APP. 95-27
• Parties: GORDON ROSE AND JUNE ROSE, DBA QUILL GORDON FLY FISHERS; BIG HORN COUNTRY OUTFITTERS, INC.; RECREATION DEVELOPMENT SYSTEMS, INC; JOE S. BASSETT, DBA SCHIVELY RANCH; MIRACLE TRUST, DBA LITTLE BIG HORN CAMP; AND BIG HORN BUSINESS ASSOCIATION, INC., PLAINTIFFS/APPELLANTS, v. DENIS ADAMS, TAX COMMISSIONER OF THE CROW TRIBE; TYRONE TEN BEAR AND STEVE STEVENS, MEMBER OF THE CROW TRIBAL TAX COMMISSION, DEFENDANTS/APPELLEES.
• Court: Crow Court of Appeals in And For the Crow Indian Reservation Crow Agency Montana

GORDON ROSE AND JUNE ROSE, DBA QUILL GORDON FLY FISHERS; BIG HORN COUNTRY OUTFITTERS, INC.; RECREATION DEVELOPMENT SYSTEMS, INC; JOE S. BASSETT, DBA SCHIVELY RANCH; MIRACLE TRUST, DBA LITTLE BIG HORN CAMP; AND BIG HORN BUSINESS ASSOCIATION, INC., PLAINTIFFS/APPELLANTS, v. DENIS ADAMS, TAX COMMISSIONER OF THE CROW TRIBE; TYRONE TEN BEAR AND STEVE STEVENS, MEMBER OF THE CROW TRIBAL TAX COMMISSION, DEFENDANTS/APPELLEES.

CIV. APP. No. 95-27

Crow Court of Appeals in And For the Crow Indian Reservation Crow Agency, Montana

January 11, 2000

Appeal from the Tribal Trial Court.

James E. Torske, Attorney at Law, Hardin, Montana, for Appellants.

Dale White, Attorney at Law, Boulder, Colorado, for Appellees.

OPINION

DESMOND SPECIAL JUDGE.

INTRODUCTION

¶1 This is an appeal of an action challenging the power of the Crow Tribe to enact a sales tax on tourist activities within the Crow Indian Reservation and impose it on all tourists both non-Indian and Indian.The Tribal Court upheld the tax as a valid exercise of tribal authority.We affirm in accordance with the following.

STANDARD OF REVIEW

¶2We review the Trial Court's conclusions of law under a de novo standard.See, American International Enterprises Inc. v. F.D.I.C.3 F.3d 1263(9th Cir.1993), and its conclusions of fact under a clearly erroneous standard.Anderson v. City of Bessemer City,470 U.S. 564(1985).Thus we perform an independent review of the Tribal Court's legal conclusions but we will not substitute our judgment for that of the Tribal Court on its factual determinations.

PARTIES

¶3Appellants, five non-Indian owned businesses, are each involved in some type of recreation-oriented activity on the Crow Indian Reservation.AppellantGordon Rose is the managing partner of Quill Gordon Fly Fishers, a business that sells fishing equipment, provides lodging and offers guiding services; its business offices are located on fee land within the boundaries of the Crow Indian Reservation.AppellantJoe S. Bassett is the owner of the Schively Ranch, a guest ranch located on fee land but whose hunting preserve includes land leased from a tribal member and who conducts limited activities on trust land.AppellantNick Forrester is the President of Recreation Development, Inc., a hunting and fishing lodge that sells fishing equipment and provides guiding services for fishing and bird hunting.He leases land from the 40 Mile Colony that is used as a bird hunting preserve.Some of that land is trust land, although he does not intentionally conduct activities on trust land.AppellantDennis Whitledge is the Manager of the Little Big Horn Campground, which is located on fee land and contains a campground, motel, grocery store, gas station and laundromat.AppellantGeorge Kelly is the President of Bighorn County Outfitters Inc. which sells products related to the fishing industry and provides lodging and fishing guiding services.AppelleeDenis Adams is the Crow Tribal Tax Commissioner.Appellees Tyrone Ten Bear and Steve Stevens are members of the Crow Tribal Tax Commission; Appellee Ten Bear formerly chaired the Commission.

PROCEDURAL BACKGROUND

¶4 The Crow Tribal Council enacted the resort tax at issue on January 14, 1995.(Ch. 4, Crow Tribal Taxation Code, "CTTC";Crow Tribal ResolutionNo. 95-18.Complaint Ex.A) The United States Bureau of Indian Affairs approved the tax on June 9, 1995, in accordance with Article VI, Section 10 of the Crow Tribal Constitution, which provides that tribal taxes are "subject to review by the Secretary of Interior."The Bureau of Indian Affairs Area Director's letter approving the resort tax stated in relevant part,

Adoption of this tax code is within the inherent right of the Crow Tribe in exercising its jurisdiction on the Crow Indian Reservation.

Our decision whether to approve this code focuses primarily on whether the tax code is consistent with Federal statutes, regulations, and policies the Bureau of Indian Affairs (BIA) has the responsibility of implementing.It is our finding that this code is consistent with applicable Federal law implemented by the BIA.Letter to Tribal Chair, June 9, 1995p.1, Complaint, Ex. B.

¶5 The resort tax is a "sales or transaction" tax that imposes a 4% tax on "the gross receipts from all goods and services sold or used on the Reservation in connection with a resort business."CTTC §4.02 Section 4.01(a) CTTC, defines "resort businesses" as including but not limited to:

(1) Campgrounds, dude ranches, guest ranches, hunting and fishing lodges, bed and breakfast establishments,souvenir shops, hotels, motels and other lodging or camping facilities and

(2) Hunting and fishing guide services and recreation equipment rentals received or used on the Crow Reservation.

Section4.04 CTTC, provides that the tax "shall be imposed on the consumer" and shall be collected by the owner of a resort business from the consumer, and that the owner is entitled to keep 2% of the total tax due to cover administrative costs.The resort tax is similar to the Montana state lodging facility tax, which is a tax on users of lodgings for less than 30 days, collected by the businesses operating the lodging facility and to the Montana local option resort tax.See, §15-65-101, et seq.;§7-6-1501 et seq.Appellee Commissioner Adams testified at the trial that several Tribes have also enacted similar taxes.

¶6Appellants paid estimated taxes for the first quarter of 1995 under protest and filed this action on July 26, 1995.The Tribal Court action was then stayed while Appellants exhausted their administrative remedies before the Crow Tribal Tax Commission.On November 1, 1995, the Crow Tribal Tax Commission held a hearing on Appellants' request for exemption from the tax and a rebate.The Commission decided on December 20, 1995 that Appellants were not entitled to an exemption or to a refund of the taxes they had paid under protest.Appellants then amended their Complaint to include an appeal of the commission's orders.Appellees filed a counterclaim seeking a declaratory judgment that the tax is valid as applied to Appellants and an order requiring Appellants to pay the taxes due.Following a trial on the merits, the Tribal Court held on January 5, 1998, that the Crow Tribal Court had jurisdiction to determine the challenge to the validity of the ordinance, and that the Crow Tribe has authority both to impose the tax, and to require its collection by resort businesses.

ISSUES ON APPEAL

¶7We restate Appellants' grounds of appeal as follows:

1.The Crow Tribal Trial court erred in its analysis of whether or not the resort tax, as applied in this case, is a valid exercise of tribal authority by applying tribal rather than federal law.

2.Under the applicable federal law the Tribal Court lacks subject matter jurisdiction over this case and the Tribal Council lacked authority to enact a tax that would be imposed on non-Indians as well as on Indians.

3.Even if the Tribe did have authority to impose a resort tax on non-Indians, the taxpayers have not accepted privileges of on-reservation activity sufficient to justify the tax thus the Tribe cannot establish existence of a "nexus" for imposition of the tax.

4.The tribe lacks jurisdiction to require appellants to collect the tax.

DECISION

¶8 The Crow Tribal Court analyzed whether or not the resort tax is a valid exercise of tribal authority by applying both tribal law and federal law and thus did not err.

¶9 The Tribal Court applied both Tribal and federal law when it analyzed whether it had jurisdiction to adjudicate this matter.The Tribal Court correctly concluded that it had jurisdiction under tribal law.The Tribal Court found it had subject matter jurisdiction under Crow Tribal Code§3-2-205 which states in relevant part:

Jurisdiction--Subject Matter.The Crow Tribal Courts shall have jurisdiction over all civil causes of action arising within the exterior boundaries of the Crow Indian Reservation....

As for personal jurisdiction, the Court held that under Crow Tribal Code§ 3-2-203, the court has jurisdiction over all persons who enter and or transact business within the exterior boundaries of the Crow Indian Reservation.Further the Court noted that the Appellants consented to personal jurisdiction by filing this lawsuit.The Tribal Court held that the tax was within the Tribe's constitutional authority, and enacted in accordance with tribal law.

¶10 The Tribal Court also found it had subject matter jurisdiction under federal law, citing the cases of National Farmers Union Ins. Cos. v. Crow Tribe of Indians,471 U.S. 845(1985), ("National Farmers Union"), for its exhaustion rule and finding that neither Montana v. United States,450 U.S. 544(1981), ("Montana"), nor Strate v. A-1 Contractors,117 S.Ct. 1104(1997), ("Strate"), preclude jurisdiction.The Court further stated that Montana was distinguishable but that even if its main rule did apply, the Court had jurisdiction under both of its exceptions.

¶11 For the benefit of both the parties and this reviewing court the Tribal Court could have developed a more thorough analysis of its subject matter jurisdiction in accordance with National Farmers Union by interpreting and applying treaties and statutes specific to the Crow Tribe.See, e.g., Sage v. Lodge Grass School District, Civil No. 287(CrowCt.App.July 30, 1986)[1986 CROW 1].However, it clearly based its ruling on tribal taxation authority on an assumption that the Crow Tribal regulatory and adjudicatory taxation authority had not been divested by federal statute or treaty.Nor have Appellants cited any federal statute or treaty concerning the Crow Tribe that explicitly divests the Tribe of authority to impose the resort tax or adjudicate its...